Long term for me: can't go wrong with the banks... (ASF.NZX)
(just my view...)
Disclosure: Hold ASF
Printable View
Long term for me: can't go wrong with the banks... (ASF.NZX)
(just my view...)
Disclosure: Hold ASF
This is an exercise of matching up the appropriate Smartshare fund to achieve the desired asset allocation mix.
Given there is a very long time horizon , a large , perhaps very large chunk could be in growth assets, but the risk profile should be considered.
My recommendation would be about 60 - 80% growth, a bit of property and the rest bonds. Maybe 15% of value in NZ , maybe a quarter in Aus, and a third in the US
So this would be a good start to forming up the mix
US 500 35.00% Aus Top 20 15.00% NZ Top 10 10.00% Europe 10.00% Asia Pac 5.00% Emerging Mkts 2.00% Total World 5.00% Global Bond 3.00% NZ Bond 5.00% NZ Prop 5.00% Aus prop 5.00% 100.00%
But if one delved a bit deeper or had more to work with one could consider some of the mid cap options as well.
I'm not sure how Smart Shares hedges currency impacts either, which is a critical element because in my mind you DONT want hedged funds for all off shore investments. But it does increase volatility.
I wouldn't consider investing all the funds at the same time either. spread out the buying in phase over a year or more if possible. buy on dips.
my thoughts...
My sentiment exactly. Look at the stocktastic results.
...The Berkshire chairman has long argued that most investors are better off sticking their money in a low-fee S&P 500 index fund instead of trying to beat the market by employing professional stockpickers...
Hmm. Some actual figures.
Here's an article analysing the S&P adjusted for inflation : http://www.simplestockinvesting.com/...al-returns.htm
That article reports : S&P adjusted for inflation and with all dividends reinvested, average pa:
1950's 16.7 %
1960's 5.2 %
1970's -1.4 %
1980's 11.6 %
1990's 14.7 %
2000's -3.4 %
1950-2009 7.0 % (Whereas Berkshire averaged 24% pa from 1967 to 2007, I think. Probably not inflation adjusted, but surely well ahead?)
Investing in the s&p index wouldn't have got you far in the 1960s or 1970s or 2000s - those figures include dividends remember. While his bet did spectacularly well from 2008 onwards, that was a serious bull market, as it happened. By contrast, for example, the S&P was flat from 2000 to 2012.
I'm not against owning an index. Just saying investment decisions should be backed by an objective. I'm dubious that any single investment will outperform all others over time, that's all. So I was putting up figures against this growing conviction that passive index investments are the only sensible choice. They are a choice, yes. But the other options remain on the table.
I don't want to bring up the passive vs active debate. The task is to divide the 100k amongst the available smartshares. So far peat gets the brownie points
I would probably drop the bond and put more into property. And maybe a bit more focus on midcap that the ozzy 20 and NZ10 in those markets to give better diversification and to try and catch winners on the way up (they probably get losers on the way down to unfortunately).